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April 22, 2009

Strategic Management of Chanel Clothing Line

Strategic Management:

Rediscovering Lessons from the
“Little Black Dress”

Concept of
“Little Black Dress” in Strategic Management

Strategic management is “that set of decisions and actions which lead to the
development of an effective strategy or strategies to help achieve corporate
objectives” (1996). A successful application of this concept was done by
Gabrielle (Coco) Bonheur Chanel in 1926 by introducing the little black dress
into the fashion arena making her one of the most influential and innovative
designers during her time. The concept of the “little black dress” refers to a
fashion trend, value representation, and business strategy. As a trend, the
little black dress dwells in almost every woman’s closet around the world
because it integrates comfort, practicality and fashion into a single dress. The
little black dress also represents value because it stands for women’s freedom
and assertion of women’s rights as a deviation from the previously restrictive
corset. The “little black dress” evolved into a business strategy of introducing
a clothing concept that would meet consumer demand. Coco Chanel was able to
introduce an enduring concept that helped build the present Chanel clothing
line.

One
of the most important objectives of the business is to gain strategic
competitiveness, which is “achieved when a firm successfully formulates and
implements a value-creating strategy” (
2003). The “little black dress” constitutes a value-creating strategy because it
addresses women’s consumer demand for comfortable and practical dresses. The
integration of these ideas into the little black dress made it highly valued by
women.

Key to the success of a business strategy is the manner that the
firm is able to achieve initial competitive advantage through the adoption of a
value-creating strategy that competitor companies cannot imitate or find costly
to duplicate ( 2003; 2005). Chanel was able to achieve competitive advantage
through the little black dress concept but it failed to achieve sustainable
competitive advantage. Chanel was initially successful by being the first to
develop the concept. However, the increasing popularity of the dress attracted
other designers to ride-on with the concept and imitate the dress. There have
been innovations to the little black dress in terms of fabric, length and cut
from different designers. At present, all the elite clothing lines have their
own little black dresses.

SWOT Analysis

Strengths

One
of the strengths of the little black dress is that it is a new and innovative
concept during its initial introduction to the market. In 1926, the primary
fashion trend for women is corset dresses that bind the stomach and abdomen up
to the limit that the woman can endure and the skirt comprise of layers of
fabric to make it stiff and retain its form. Any other kind of dress is
considered as inappropriate women’s clothing. No other alternative was able to
draw an overwhelming number of women out of the corset and into clothing that is
more comfortable but the little black dress. Women liked the little black dress
because it enabled them freedom from the corset and the heavy petticoats by
allowing them comfort and movement through the light fabric and flowing cut.
During this time, the little black dress was a new experience, and it was a
pleasant experience.

Another of the strengths of the little black dress is both the material and
non-material quality of the dress concept that transcends traditional
perspectives. Material quality refers to the value attached to the fabric,
length and cut of the dress while non-material value refers to the feeling of
contentment, comfort and confidence that women wearing the little black dress
experience, constituting added value to the price paid for the dress. The little
black dress also represents the liberation of women. Women wearing the little
black dress feel empowered to go beyond the traditional role of women as
homemakers. The little black dress revolutionized women’s fashion sense and
their role in society.

Still another of the strengths of the little black dress is its ability to unite
women by offering something that they all want. The dress was able to address
the fashion demands of women who are in the process of rediscovering their role
in society as educated and working women. In marketing, this means an almost
complete monopoly of the market because majority of women demand for practical
and comfortable clothing. As a management decision, introducing the little black
dress during this time was an effective market breakthrough strategy.

Weaknesses

One of the weaknesses of the little black dress is its revolutionary
characteristics that tend to draw criticisms from some sectors of society
especially the more traditional sectors. This is because black was used
exclusively as the colour of clothing for mourning and there are people repelled
by constantly wearing black when they are still limited to the mindset of
associating black with mourning and sadness. At present, black is the common
colour used in formal or business attire. Conservative groups were also
uncomfortable seeing women showing their legs, arms and neck compared to the
traditional floor length, long-sleeved, high-neck dresses. During this time,
short dresses and the showing of flesh were associated with women prostitutes.
The little black dress was a radical idea and like every radical idea, became
subject to as much criticisms as there were appreciations.

Another of the weaknesses of the little black dress is its representation
repelling other segments of the population. The 1920s was part of the period of
society’s struggle between maintaining tradition and embracing change. In
relation to gender roles, women were increasingly getting into college and
finding professional work even entering fields previously held as men’s work
such as top management positions and physical jobs. These women were also
enjoying the benefits of the little black dress and constituting the primary
market segment for the dress. The dress became associated with liberal women.
The entry of women into schools and the workplace caused some resistance from
both traditional women and men resulting to this group’s general abhorrence of
women in little black dresses because of the association of women who go to
school and work with the dress.

Most of the strengths and weaknesses of the little black dress stems not from
traditional, formal theories but from the less formal, social processes (2005)
offering strategic advantages to the business depending upon how these concepts
are actualized. Both the strengths and weaknesses of the little black dress
revolves around the two aspects of a changing society, the environment upon
which the little black dress was initially introduced, with the strength
supported by the people receptive to change and the weaknesses created by people
resistant to change. As a strategic concept, the little black dress was
successful in establishing a fashion trend but it was also subjected to
different criticisms coming from the traditional sectors of society. The
attention that the little black dress received made it as not merely a product.
It became a force, which influenced the fashion sense, lifestyle and new
perspective of society.

Opportunities

One of the opportunities opened by the little black dress is the possibility of
expanding the product into a clothing line through diversification ( 2004).
Diversifying the concept of the little black dress involves creating different
designs that would address the taste of different women depending upon the
occasion and demographic considerations such as ability to pay, age, cultural
background and even geographic location. Although the basic features of the
little black dress is the kneeish length, black colour and light fabric there
are different ways of varying the cut and design to fit different occasions and
tastes. The concept of the “little black dress” can expand into lingerie, casual
dress, party/cocktail dress, and formal/business attire. Product diversification
may result to the creation of working clothes exclusively for men and women and
casual or party dresses that caters to the different occasions where women
participate. Different clothes may also be created to fit age by varying the
fabric, cut, length and colour combination of clothes such as longer length,
longer sleeves and higher neckline for more conservative dressing and shorter,
sleeveless and lower neckline for a bolder mood.

Another of the opportunities available to the little black dress is the
possibility of diversifying the concept into accessories that complement the
little black dress and the entire clothing line and lifestyle such as belts and
bags, jewellery, hair accessories, and cosmetics, toiletry and fragrance.

However, the eventual downside of these opportunities is that an increasing
number of designers are following the move of Chanel. This means that Chanel
needed to establish a lead in realizing these opportunities to maintain an
advantage.

Threats

One of the threats faced by the little black dress introduced by Chanel is the
rise of competitors ( 2004) in the market after the concept was proven
successful. The popularity of the little black dress in different parts of the
world created a favourable environment for different fashion designers and
clothing manufacturers to venture into the “little black dress” concept. This
constitutes a threat because the increase in fashion designers offering little
black dresses to the market divides the market, which was previously almost
entirely belongs to Chanel. A divided market means lesser customers affecting
the profitability of Chanel.

Another related threat is the challenge that other designers pose to Chanel
transforming the competition into a designers’ war. Designers selling their
little black dresses were so numerous that the competition shifted from matching
Chanel’s little black dress with the prevailing fashion to each designer trying
to outperform other designers to develop the best little black dress.

Several years
after the introduction of the little black dress and at the height of its
popularity, the fashion industry was at frenzy over the contest of producing the
most fashionable little black dress. At present, Chanel has become one of the
prominent clothing lines but it has lost its previous exclusive hold of the
concept of the little black dress. Coco Chanel and the Chanel clothing line only
enjoy the recognition of being the pioneer of the little black dress.

Strategic
Advantage

The
core strategic advantage of the little black dress concept, attributed to its
success, is its enduring quality (Joyce & Wood 2002). Thus, the strategic
advantage revolves around the quality of the concept of the little black dress
but as a product, the little black dress has been imitated and reproduced. The
concept is so undeniably grand that every designer incorporates the concept of
the little black dress into their creations and every woman has or longs to have
a little black dress in their wardrobe. The concept was so enduring that it
became part of the fashion statement of women for decades. In the recently held
little black dress competition, the winners come from different generations with
the first place won by Audrey Hepburn through her little black dress in
Breakfast at Tiffany’s followed by Princess Diana and Elizabeth Taylor. Part of
the top ten included Julia Roberts, Nicole Kidman and Cameron Diaz who wore
little black dresses created by Valentino, Chanel and Roland Moret respectively.
The little black dress is also a mainstay in decades of proms across the world.

Business Level
Strategies

(1998)
identifies several generic business level strategies, which are cost leadership,
focus, and differentiation implemented in the business with the purpose of
meeting the challenges posed by the five forces. According to the author the
formation and implementation of these generic strategies involves the phases of
policy formulation and then implementation. The policy formulation stage
includes positioning the business relative to its rivals, anticipating the
possible changes in demand and level of technology and integrating these changes
in the plan, and influencing competition through strategic actions.

The
best business level strategy that works for the little black dress is
differentiation, during its initial debut and at present. During its
introduction, the little black dress swept women off their feet because it was
new, different and better than the current fashion. At present, differentiation
is still the strategy with designers, including Chanel designers, trying to come
out with features of the little black dress that they can claim as their
signature since the concept of the little black dress has evolved into a generic
fashion concept. Generally, Chanel succeeded in its competitive strategy of
developing the concept of the little black dress but it failed to maintain an
exclusive hold over the concept by its failure to retain even a particular
feature of the little black dress as a Chanel signature after the concept
evolved into an independent generic entity. Chanel should have come out with a
signature feature of the little black dress distinguishable from the designs of
other fashion lines. Despite Chanel’s failure to gain sustainable competitive
advantage, the little black dress concept still serves as a great example of an
effective competitive strategy.